We had two cuts in November and December. Will the RBA cut again in February? Opinion is mixed on this one. There is no obvious problem that calls for a rate cut right now, but with the belief that problems may arise in 2012, or that unemployment may rise further, those calling for a rate cut base it on the theory of getting in first before the problems happen.
The banks keep warning of rising international funding costs, and the best argument for a rate cut lies in keeping the bank funding costs at manageable levels.
However there is consensus on one thing: if the RBA cuts rates, the banks won’t pass the cut on, at least, not in full, arguing that their funding costs have risen elsewhere and they need this cut to balance out.
So mortgage payers will need to look for further RBA cuts during 2012 before they get any good news on their mortgage payments. At least rates are not going up (subject to any Euro debacle) so this should increase confidence in the housing market, where we are anticipating largely stable markets in 2012.